Systems And Strategy Execs Switch Roles At Big Blue
May 6, 2013 Timothy Prickett Morgan
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Ginni Rometty is not cleaning house after a particularly unprofitable–and surprisingly so–first quarter for its Systems and Technology Group. But just after The Four Hundred went on hiatus at the end of April, IBM‘s CEO and chairman announced that she was swapping the roles of two executives who are long familiar to the OS/400 and IBM i community. The executives who are swapping desks are Rod Adkins, who has been running Systems and Technology Group for the past couple of years, and Tom Rosamilia, who used to work for Adkins as general manager of the System z business and then the additional Power Systems business unit within Systems and Technology Group. In May last year, Rosamilia, who had been running the Power Systems and mainframe businesses for a few years, was tapped by then-relatively new CEO Rometty to be her vice president of corporate strategy and general manager of enterprise initiatives, which basically meant he was being tasked to chart out Big Blue’s course for the decade ahead. In the wake of that appointment, Colin Parris, who had been working for Rosamilia in the Power Systems line, was named general manager of that product, and Doug Balog, a long-time System x development manager, took over as general manager of the System z mainframe division. Despite the fact that Power Systems revenues were down 32 percent in the first quarter and mainframe sales were down 7 percent as more than $400 million in deals slipped into the second quarter, both Parris and Balog are expected to keep their jobs. Power Systems sales were crashing slightly less hard than the Unix system market overall, and the mainframe miss was due to sales execution issues, not development and marketing.
Then again, IBM could radically revamp its Systems and Technology Group, particularly if it does indeed spin out all or part of its System x X86 server business to Chinese PC and server maker Lenovo Group, as is rumored. And that may mean a lot more executives will change jobs. Rometty announced the executive changes on April 24 in a letter to the 300 or so top managers at the company, which are collectively known as the Integration and Values Team: Dear I&VT Member: I want to share some news about IBM’s senior leadership team. Effective today, Rod Adkins will become senior vice president, Corporate Strategy, reporting to me. Rod takes on this role at an important time. As you know, our strategic beliefs about the new computing model, new markets and clients, and the evolution of our own company–our continuous transformation–are really taking hold. We are in a leadership position, and we will extend it by continuing to act aggressively on these beliefs. Rod comes to his new position with a wealth of leadership experience and insight in both business and technology. We will look to him to bring that leadership and insight to bear in helping to shape our long-term enterprise strategy. Succeeding Rod as the leader of Systems & Technology Group will be Tom Rosamilia, reporting to Steve Mills. Tom has a rich background in all aspects of systems, from Power and mainframe to WebSphere. Tom will help the STG team further accelerate its transformation in pursuit of high-value opportunities. I know you join me in wishing Rod and Tom well in these important new assignments. If I were a guessing man, and I am for a lot of what I do in the day-to-day jobs I have, I would guess two things. First, as I said before when Rosamilia took over Power Systems and then the strategy chief position, he is young enough and successful enough to be Big Blue’s next CEO after Rometty several years hence. (All of IBM’s other top execs are too old to get the job, unless IBM’s board ignores the traditional retirement age of 60.) Rosamilia is a mainframe developer from three decades ago who ran database and middleware development as well as hardware divisions, and that is about as good as it gets in terms of cross training. (A services assignment and a sales assignment is probably in the works in his future if Rosamilia is indeed the front-runner for the CEO position someday.)
And second, if Rosamilia had come up with a plan for Big Blue’s future in the job he has held for the past year, there was no doubt a substantial restructuring in the company’s Systems and Technology Group. Particularly with the X86 server business not making money as we all presume. But it is worse. IBM lost the game console chip business with the next-generation Sony PlayStation 4 to Advanced Micro Devices. Its Power7-based “Blue Waters” super did not generate the revenues IBM expected because it was too expensive to build, and no matter what IBM does, the Unix server business will at best stabilize and will not return to its former glory. I think IBM will stop making its own chips and try to sell off its fabs, with the only possible buyers being GlobalFoundries and Taiwan Semiconductor Manufacturing Corp as far as I can see. IBM won the Unix battle, but perhaps it has lost the systems war. But maybe not. IBM could be clever and become an ARM licensee and make ARM processors a peer to Power and try to shoot higher and lower than X86 processors in the data center. I am not saying that this strategy would work, but if the next few years of my career depending on convincing someone to do something, I would probably make that argument. So, we may yet end up with an Application RISC Machine System/500. We live in interesting times. That much I know for sure. And now Rod Adkins will have the job of mulling that over. RELATED STORIES Power Systems Sales Stalled–Again–By Power7+ Rollout Will Big Blue Deep Six Its X86 Server Biz? IBM Splits Global Services Again As Mike Daniels Steps Down As GM Parris Named Power Systems GM, Rosamilia Moves Up Rometty Kicks Off 2012 With Leadership Team Changes Palmisano Hands The IBM Reins To Rometty IBM Reorganization Tucks Systems Under Software
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